The convergence of the following six principal workforce trends requires a coordinated response:
1. Knowledge worker shortfall. The shortfall of knowledge workers will likely increase as demand rises and a number of factors reduce supply. Accelerating retirement of Baby Boomers, lower birth rates, increased competition for skilled workers worldwide, stagnant college graduation rates, and declining competency in basic skills such as writing and math by high school students and even college graduates are all contributing to a talent shortage in the knowledge economy. The Employment Policy Foundation estimates that by 2012 there will be about a six-million-person gap in the U.S. between the number of students graduating from college and the number of workers needed to cover job growth and replace retirees.
2. Changing family structures. Only 17 percent of U.S. households today have a husband who works outside of the home and a wife who does not, down from 63 percent a few generations ago. Other changes, like the decreased rate of marriage, reduced or delayed childbirth among married couples, an increase in single-parent families and in dual-career families, have prompted scholars to declare the “end of the lockstep lifestyle.” As a result, fewer and fewer workers have the support system at home upon which the corporate ladder model depends.
3. More better educated women. Women are entering the workforce better educated, on average, than men and therefore better prepared to contribute to knowledge-driven organizations. Nearly 60 percent of all college graduates today are women, and they now matriculate with a higher grade point average and more honors than men. Half of all law students are women, as are nearly half of all medical students, and more than 40 percent of MBAs. More than half of all management jobs today are held by women. The ranks of married women in the workforce have doubled since 1970. Yet, most women do not work continuously full-time throughout their careers, and therefore, do not fit well in the corporate ladder model.
4. Changing expectations of men. Men are spending more time with their families than in past decades. Many have reached a point where preserving or increasing their personal time is more appealing than bigger jobs and more money. Control over their work schedules is a high priority. A 2006 study by the Association of Executive Search Consultants found that 56 percent of senior executives surveyed would strongly consider refusing a promotion if it meant fewer hours available for their personal lives. Studies show, however, that very few men take advantage of paternity leaves or other “flex options” because they believe these benefits are meant only for women and that taking them might harm their careers.
5. Generations X and Y. Defined as those between 18 and 43 years of age, these demographic groups have high expectations for both personal and work lives. They view a career as a personalized path that meets an individual's interests and development goals, and includes many diverse work experiences. They are technologically savvy, adaptable to change, and often eager to adopt nontraditional work methods and schedules. Whether or not all these expectations can or will be met is a fair question, but many workers are not content with the status quo. A poll of workers by the Society for Human Resource Management in 2006 found that 75 percent were looking for a new job; of these, 48 percent wanted better career-development opportunities, while only one-third said higher compensation was their chief objective.
6. Technology. New technologies continue to pave the way for employers and workers to create new options for when, how and where works get done. The explosive growth of broadband has been a major factor in enabling the virtual workplace. In 2000, less than 5 percent of U.S. households had broadband connectivity, but by October 2006 the number had risen to over 76 percent. Other technologies supporting new methods for how and when work gets done include virtual private networks, email, instant and text messaging, cellular phones and video-conferencing. Also, new software applications in business intelligence, business process management and other information management disciplines foster innovation and productivity in the virtual workplace.
These trends, taken together, signal the end of the traditional career path and work pattern. Individualization is now the career approach of choice, and a new organizational structure is needed to make it work.
Despite a workforce that is clamoring for more flexibility, there is mounting evidence that formal flexible work arrangements (“FWAs”) are not the answer. For example, even though some ninety percent of law firms offer FWAs, fewer than four percent of all lawyers are actually on those programs. Lawyers cite the career penalty and stigma associated with part-time work as the reason they avoid them. Also, while many Fortune 500 companies have instituted formal flexible work policies to help retain talented women, the turnover rate for women continues to be higher than for men. One of the main reasons women cite is the lack of real flexibility.
Formal flexible work arrangements have not delivered on their potential because they are limited in three ways: reach, scope and concept. In terms of reach, FWAs are narrowly focused solutions that must be negotiated on a case-by-case basis between an individual and his/her employer. This makes them difficult to scale. FWAs are limited in scope because they address only one dimension—schedule—of a person's career. For example, most flexible work policies focus on hours worked per day or days worked per week, but do little to address changing needs over the course of a worker's career. FWAs are limited in concept, positioned as accommodations, and therefore compromises, to the ideal of full-time workers who will do anything to climb the corporate ladder.
But the traditional “ideal” workers are about to retire, and the stresses of the tides going out and the tides coming in are beginning to show. Workers who will make up tomorrow's workforce have very different notions of what they want out of work. While Generation X and Y workers are not slackers, they are also not willing to sacrifice their families and personal lives. They insist on meaningful work and meaningful personal lives. Women, who account for about 50 percent of the professional workforce in the U.S. and 60 percent of the students in U.S. colleges and universities, have long been striving for this very same balance.
Shifts in demographics, values and expectations are changing not only how people look at where, when and how they work, but also how they view careers. Workers want the ability to make reasonable choices about fitting their lives into their work and their work into their lives—both today and as their needs change over the course of their careers. The trade-offs made in the past will not be so readily accepted in the future. Since the traditional career track is becoming less attractive for the majority, there is a need for a way to implement an adaptable work culture within an organization that is rewarding to both women and men of all current generations, and inviting to future ones.